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PERTH, Australia, July 24, 2012 /CNW/ - Mirabela Nickel Limited
("Mirabela" or the "Company") (ASX: MBN) (TSX: MNB) is pleased to
announce its unaudited second quarter results for the period ended 30
June 2012.

HIGHLIGHTS

Production for the quarter of 4,276 tonnes of nickel in concentrate (Q1
2012: 4,245 tonnes)

Sales for the quarter of 4,787 tonnes of nickel in concentrate (up 15%
from Q1 2012: 4,155 tonnes)

Achieved full year unit cash cost guidance six months early with unit
cash costs of US$6.03/lb for the quarter (down 18% from Q1 2012:
US$7.37/lb)

Average mined nickel grade of 0.50% for the quarter (up 16% from Q1
2012: 0.43%) and mining material movement of 10.0 million tonnes in
accordance with the mine plan

Average processing plant nickel recovery of 58% (Q1 2012: 58%) and
average nickel feed grade of 0.51% (Q1 2012: 0.48%) for the quarter

Cash on hand and on deposit of US$166 million (Q1 2012: US$60 million)
at quarter end with the successful A$120 million equity raising
strengthening the balance sheet and increasing financial flexibility

Processing Plant 7.2Mtpa construction programme now complete with the
second crusher successfully commissioned and in ramp-up and the
desliming plant operational

Mirabela has completed a successful second quarter with a step change
reduction in C1 unit cash costs, improving mined nickel grades,
commissioning of the second primary crusher and successful commercial
testing of the desliming plant. During the quarter the Company also
successfully completed its open pit extension exploration drilling
programme.

Mirabela remains on track to achieve towards the lower end of the
production guidance of between 19,000 to 21,000 tonnes of nickel in
concentrate for 2012. During the quarter the Company successfully
achieved its C1 cash unit cost guidance of moving towards US$6.00/lb by
the end of 2012, six months ahead of schedule. The Company targets C1
cash costs to be below $6.00/lb for the remainder of the year at the
current exchange rate. Capital expenditure is within the full year
guidance of US$60 million, with US$30 million spent year to date.

Safety

Mirabela continued its strong safety performance with only one lost time
injury during the quarter. The 12 month moving average Lost Time Injury
Frequency Rate closed the quarter at 0.96, improving from 1.14 at the
end of Q1 2012. Mirabela is continuing to target further improvements
to this strong safety record through ongoing safety training and safety
improvement programmes.

Production Statistics

Three months
ended30 Jun 2012

Three months
ended31 Mar 2012

% change
favourable/
(unfavourable)

Year to Date
2012

Mining

Total Material Mined

Tonnes

10,042,953

10,717,738

(6)

20,760,691

Ore Mined

Tonnes

1,504,081

1,773,900

(15)

3,277,981

Nickel Grade

%

0.50

0.43

16

0.47

Processing

Total Ore Processed

Tonnes

1,447,765

1,535,292

(6)

2,983,057

Nickel Grade

%

0.51

0.48

6

0.50

Copper Grade

%

0.13

0.12

8

0.13

Cobalt Grade

%

0.01

0.01

-

0.01

Nickel Recovery

%

58

58

-

58

Copper Recovery

%

71

70

1

70

Cobalt Recovery

%

35

34

3

34

Production

Nickel in Concentrate Produced

DMT

4,276

4,245

1

8,521

Copper in Concentrate Produced

DMT

1,316

1,331

(1)

2,647

Cobalt in Concentrate Produced

DMT

72

76

(5)

148

Sales

Nickel in Concentrate Sold (1)

DMT

4,787

4,155

15

8,942

Copper in Concentrate Sold (1)

DMT

1,570

1,449

8

3,019

Cobalt in Concentrate Sold (1)

DMT

84

80

5

164

(1) Includes sales volume adjustments upon finalisation of assays.

Mining

Total material movement was in line with the mine plan and processing
plant feed requirements for the second quarter, with 10.0 million
tonnes of material moved for 1.5 million tonnes of ore. Mined grades
improved from 0.43% during the first quarter to an average of 0.50%
during the second quarter, in line with expectations.

In accordance with the mine plan, over 90% of the ore mined during the
quarter was from the Central pit. The Central pit zone mined was close
to the boundary of the pit and yielded higher than expected MgO levels,
impacting recoveries in the process plant. During the quarter a
localised geological fault was identified in the bridge between the
central and south pits, which resulted in reduced ore production for
the quarter by approximately 30k to 40k tonnes (2 to 3%). The short
term mine plan has been adjusted to account for the fault and remediate
the issue.

During the quarter Mirabela achieved solid performance from its truck
and drilling fleets. The Company received delivery of four new DML
drill rigs during the quarter, with all four commencing operation and
completing the Company's strategy to insource production drilling.
Loader availability has started to improve but remains below target and
remains a key focus area moving forward.

Processing

During the quarter 1.4 million tonnes of ore was milled, at an average
head grade of 0.51% nickel and achieving an average recovery of 58%.
Recovery performance remained on plan relative to the ore quality, but
lower than target due to higher than expected MgO levels yielded from
the area being mined in the Central pit. In addition, instability in
the mill and flotation circuit with the ramp-up of desliming and the
addition of grinding media to the SAG mill has also made it difficult
to optimise recoveries during the quarter. Optimisation of recoveries
remains a key focus area and the company has a well-structured
programme of test work in both the pilot plant and the process plant
over the second half of the year targeting increasing recoveries.

The desliming plant was successfully ramped-up to full capacity during
the quarter and was comprehensively tested with over 300,000 tonnes of
stock piled ore containing high contents of chloritic altered fines
material, previously considered uneconomic with recoveries ranging
between 40% and 50%. Desliming was successful in removing the fines
material and enabled stable performance in the flotation circuit with
economic recoveries between 55% and 60%. The desliming plant will
stand the Company in good stead as we move back into the North pit
during the second half of the year, with an increased likelihood of
batches of chloritic altered fines material from the higher level of
faulting in the softer material in the North pit.

The addition of grinding media to the SAG mill as part of the ramp-up
and optimisation programme for the mill circuit enabled the SAG mill
throughput to be ramp-up above 900 tph early in the quarter. The
higher throughput rate combined with the addition of grinding media
resulted in higher than expected wear rates of the SAG mill liners. As
a result to mitigate risk of damage to the SAG mill, throughput was
reduced to 710 tonnes per hour (78%) for the first 20 days in June and
the SAG mill relining was brought forward to the last week of June
resulting in a three day shutdown to complete the works. The SAG mill
throughput has been ramped back up to 900 tph post relining and work is
ongoing to stabilse and optimise throughput and maintain an expected
annualised rate of 7.2Mtpa.

During the quarter Mirabela produced 4,276 tonnes of contained nickel in
concentrate, 1,316 tonnes of contained copper in concentrate, and 72
tonnes of contained cobalt in concentrate. 4,787 tonnes of nickel in
concentrate was sold to Mirabela's off-take partners, Votorantim Metais
Niquel S.A. and Norilsk Nickel, an increase of 15% from Q1 2012. Two
export shipments to Norilsk Nickel were completed during the quarter.
Going forward the company expects the timing of shipments to Norilsk
Nickel to be approximately every second month. Steady deliveries to
Votorantim continued throughout the quarter.

The Processing Plant 7.2Mtpa construction programme is now complete with
the second crusher successfully commissioned and in ramp-up and the
desliming plant operational. Construction contractors have been
demobilised and all major components have been handed over to the
operations team.

Exploration(Refer Competent Person Statement at the end of the report)

Mirabela is pleased to announce new drilling results including best
results with composited down-hole intersections of 94m grading 0.75%
nickel and 86m grading 0.61% nickel.

New Composite results from Pit Extension Drilling (1)

Hole ID

From (m)

Composite down-hole
width (m)

Ni%

Cu%

MBS-622

670

94

0.75

0.21

MBS-627

562

27

0.51

0.16

MBS-628

641

86

0.61

0.13

MBS-635

510

25

0.58

0.18

(1) 0.4% Ni cut-off grade, 4m minimum mining width

The results from these four new open pit extension drill holes, combined
with the ten previously announced holes, closely match our resource
interpretation and potentially substantially increase our current open
pit mining resource of 198 Mt grading 0.52% nickel. The results show
the continuation of the ore-body underneath the North pit and work is
continuing to fully evaluate the resource potential and its amenability
to the open pit.

With these new results, the Company is on track to complete an updated
in-pit resource during the third quarter.

Drilling has also recommenced at Palestina under the licence
requirements and the Company expects to provide first drill results
during the third quarter.

A full summary of the drilling results is provided in the table below.
More details of these results are set out in Appendices 1 and 2.

During the quarter the Company successfully achieved its full year C1
cash unit cost guidance six months ahead of schedule. The unit cash
cost for the quarter of US$6.03/lb for the quarter was a significant
improvement from Q1 2012 (US$7.37/lb). The improvement was primarily
driven by cost reduction initiatives successfully completed in the
first quarter and the BRL softening against the USD (Q2 2012: 1.96
versus Q1 2012; 1.77). Current cost reduction and optimisation
initiatives are expected to further improve unit cash costs in during
the second half of the year. The Company targets C1 cash costs to be
below $6.00/lb for the remainder of the year at the current exchange
rate.

CORPORATE

Board Appointment

The Company is pleased to announce the appointment of Peter Nicholson,
of Resource Capital Funds V L.P. as non-executive director of Mirabela.
Mr Nicholson is a partner of RCF-V, a mining focused private equity
fund which recently acquired a substantial holding in Mirabela. Mr
Nicholson, a fellow of the Financial Services Industry of Australasia
and Member of the AusIMM, has a strong commercial and technical
background, developed over the last ten years with RCF, and prior to
that, in senior technical roles within the nickel mining industry.

Mr Nicholson has a Bachelor of Engineering (Mining), holds a WA First
Class Mine Manager's Certificate of Competency, a Graduate Diploma in
Applied Finance and Investment and a Diploma of Financial Advising with
the Securities Institute of Australia. Mr Nicholson is currently a
non-executive director of Cape Alumina Ltd and Global Advanced Metals
Pty Ltd and a director of Resource Capital Funds Management Pty Ltd.

Cash and Debt

As at 30 June 2012, Mirabela held balances of cash on hand and on
deposit of US$166.36 million. The increase in cash on hand from 31
March 2012 (US$59.73 million) was mainly due to: proceeds from the
issue of share capital of US$114.35 million (net of share issue costs);
finalisation of nickel sales that occurred between December 2011 and
February 2012 at an average finalisation price of US$8.88/lb compared
to an average provisional price of US$8.30/lb (US$3.26 million); timing
of trade receivables and other general cash flow movements.

The cash inflow was mainly offset by the expected capital expenditure of
US$11.73 million; an interest payment of US$17.55 million on the senior
unsecured notes and repayment of US$2.04 million relating to the
Caterpillar Lease Finance Facility.

During the quarter the Company successfully raised A$120.20 million
through a Strategic Placement to Resource Capital Fund V L.P. together
with an accelerated 8 for 13 pro-rata non-renounceable entitlement
offer. The funds raised under the Offer will strengthen Mirabela's
balance sheet, and are to be used for general working capital purposes
and to increase the Company's financial flexibility.

Share Capital

As at 30 June 2012 the Company's issued share capital consisted of
876,571,645 ordinary shares, and a balance of 4,450,000 unlisted
options and 2,686,415 performance rights were outstanding.

During the quarter the Company issued 383,932,055 shares as part of the
equity fund raising as follows:

The information in this report that relates to Exploration Results is
based on information compiled by Mr Lauritz Barnes who is a consultant
to Mirabela Nickel Limited. Mr Lauritz Barnes is a Member of both The
Australian Institute of Geoscientists and The Australasian Institute of
Mining and Metallurgy. Mr Barnes has sufficient experience which is
relevant to the style of mineralisation and type of deposit under
consideration and to the activity which is being undertaken to qualify
as a Competent Person as defined in the 2004 Edition of the
"Australasian Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves". Mr Barnes consents to the inclusion in the
report of the matters based on the information in the form and context
in which it appears.